Global Crossing Ltd. Tuesday beat out the competition to partner with SWIFT,
the banking industry’s wire transfer backbone. Industry analysts are calling
the deal — which is worth a minimum of $300 million in revenue for Global
— a major win for the fiber-optic network giant.
“…not only is this contract financially rewarding for GX, but we see it as
yet another confirmation of the company’s continuing progress in
capitalizing on its first to market position with its infrastructure and
with its global IP-VPN capabilities,” Goldman Sachs said.
“While $300 million is the minimum amount, Global Crossing expects to
realize between $500 to $600 million from the network side alone; $50 to $60
million of which should be booked this year.”
Under the deal, SWIFT — whose customers send out more than five million
messages valued at an estimated $5 trillion every business day — will
sub-contract its network operations to Global Crossing. Global Crossing will
manage the development and operation of SWIFT’s Secure IP Network (SIPN)
infrastructure as a Virtual Private Network (VPN) within its existing IP
extranet infrastructure. Global Crossing will also take responsibility for
maintaining SWIFT’s current X.25 network which will eventually be replaced
by the SIPN. SWIFT said the deal would allow it to sharpen its focus on
messaging services, transaction processing and standards setting while
Global Crossing ensures that SWIFT’s customers will have the highest levels
of availability, reliability and security through its IP network. At the
same time, the deal is intended to deliver lower costs and faster time to
The companies also signed off on a channel sales agreement, allowing SWIFT
to provide its customers with a one-stop-shop for local loop access and
managed customer premises equipment end-to-end, as well as broadband,
Internet and VPN services.
“A key operations goal for SWIFT is to deliver secure, high-quality
solutions to our customers as quickly as possible,” said Joe Eng, SWIFT’s
chief information officer. “Under this unique partnership arrangement, SWIFT
will co-design, co-implement, co-test and co-manage the network with Global
Crossing, but our customers will continue to have a single provider, a
single network and a single point of contact. It’s a win-win-win situation.”
According to Goldman Sachs, SWIFT’s decision to go with Global Crossing did
not come down to pricing issues but rather focused on existing facilities
and the ability to offer global services.
“The final decision was between GX and Radiant-Equant, with Global Crossing
emerging the victor, not only because they have the necessary assets in
place, but because they can also offer value-added services on top of the
network,” Goldman Sachs said.